The Task Force set up by the Reserve Bank of India for the revival of the diamond industry,has asked the banks to examine the requests of traders to extend loans against the stocks of polished diamonds in their inventory.

Loan against stocks,special credit cards some of the measures suggested for overcoming recession blues

The Task Force set up by the Reserve Bank of India (RBI) for the revival of the diamond industry,has asked the banks to examine the requests of traders to extend loans against the stocks of polished diamonds in their inventory.

The loans should,however,be subject to appropriate valuation by an accredited valuer,it said,adding that the move will enable traders to tide over the liquidity crisis.

The report has been made public to all stakeholders  the banks,state government and financial institutions. The implementations of the recommendations will be jointly monitored by the RBI,the state government and the forum of State Level Bankers Committee.

The Task Force has said that there is a need to disseminate the information to all borrowers across the industry so that maximum benefits are availed of. As a first step in this direction,the RBI Ahmedabad Office has requested the state government to organise workshops and seminars in association with bankers,to create awareness among borrowers /trade associations on the relaxations being made available in the policy guidelines. Banks have also been asked to take suitable measures to expeditiously release funds for the benefits of restructuring.

To take care of alternative employment opportunities of displaced workers,it is suggested that suitable training programmes are designed for them at the local district level. Preliminary estimates suggest that the local administration can train 9,000 workers per month in Surat,with help from Industrial Training Institutes (ITI),polytechnics and training institutes of other banks, the report said.

About one lakh workers can be trained in a years time in such a module. The trainees will need a stipend for their subsistence. Necessary financial support for organising the training will have to be provided by the state government, it added.

The Task Force has also recommended a request for interest rate subversion on export credit at four per cent over the prevailing 2 per cent.

As regards the provision to extend credit support to new diamond enterprises which have the potential to generate employment opportunities for the displaced workers,it has said that banks will have the power to consider any such proposal for the quick release of finance as per the guidelines.

Banks have,however,said that to make the process smooth,the units will need to register themselves with the concerned authorities.

The Task Force has also asked banks to explore the possibility of financing the procurement of rough diamonds from reputed agencies,for cutting and polishing,on a labour-intensive scale,to maximise the employment opportunities.

It has asked the district authorities to quickly identify and sponsor all eligible workers for appropriate financial assistance under various government schemes for alternative work,wherever necessary,with suitable relaxation in norms,as a one-time dispensation.

With a view to help the workers tide over the distress caused on account of job loss,soft loans with elongated repayment cycle will have to be considered,based on their identification by their employers. The diamond sector units will need to sponsor such workers to the banking system,the report said.

The Task Force has also suggested special kinds of credit cards for the workers. The General Credit Cards (GCC) with small monetary limits could be considered for the diamond workers,with relaxation in norms,it said.

Banks have also been asked to consider rescheduling of existing housing,educational and personal loans of diamond workers on a case-to-case basis.The report has also called for setting up an educational fund at the initiative of the district administration,with contributions from diamond industry,local industry associations and philanthropists,to help pay the school fees of children of displaced diamond workers.

A Group Savings-cum-Insurance Plan may have to be created with premium contribution from all stakeholders,to tide over any financial difficulties for the workers,it has said.

It added: The Task Force hopes that the implementation of these recommendations will mitigate most of the distress arising on account of problems faced by the diamond industry in Gujarat.

The Task Force has also recommended a request for interest rate subversion on export credit at four per cent over the prevailing 2 per cent.